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1、90,75,60,Deutsche BankMarkets Research,RatingHoldNorth AmericaUnited States,CompanyMosaic,Date4 January 2013Results,IndustrialsChemicals/Commodity,ReutersMOS.N,BloombergMOS UN,Exchange TickerNYSMOS,Price at 7 Jan 2013(USD)Price target52-week range,58.7162.0061.05-45.62,Potash Pricing Headwinds Likel
2、y toKeep Shares RangeboundBuybacks likely to begin mid-13 but pricing tepid and valuation fair.HoldMosaic shares rose 3%following a roughly in-line FQ2.While the companyoutlook is becoming more positive as they will be able to begin buying backstock beginning in May 13(we expect them to re-purchase$
3、1.25B of stock14)after restrictions stemming from the May 2011 Cargill Transaction lapse,and ag fundamentals remain robust owing to i)solid crop pricing,ii)historicallylow stocks-to-use levels and iii)a 2nd straight year of record farm income in12,with near-term potash pricing headwinds pressuring m
4、argins andvaluation a fair 12.4x 13E EPS,we maintain our Hold rating.FQ2 roughly in-line.Lower tax rate adds$0.12Mosaic reported FQ2 EPS of$1.05,down 25%.While$0.12 above consensus,the entire upside was due to a lower than expected tax rate added$0.12.Salesfell 16%to$2.5B on lower phosphate and pota
5、sh volumes as well as lowerphosphate pricing.In FQ3,Mosaic expects phosphates volumes of 2.5MM-2.8MM m.t.vs 3.0MM m.t.in FQ2 and lower DAP pricing($485-$515/m.t.vs$544/m.t.in FQ2).Phosphate operating rates in FQ3 are projected at 80%+vs86%in FQ2.Mosaic expects potash pricing to fall in FQ3(MOP price
6、 of$370-,David Begleiter,CFAResearch Analyst(+1)212 250-Ramanan SivalingamAssociate Analyst()212 250-Jermaine BrownResearch Associate(+1)212 250-3624jermaine-Price/price relative,$400/m.t.vs$443/m.t.in Q2)due to a larger portion of standard product sales.FQ3 Potash volumes are expected to be 1.5-1.8
7、MM m.t.vs 1.5MM m.t.in FQ2with operating rates of 70%+vs 76%in FQ2.,45301/10,7/10,1/11,7/11,1/12,7/12,Key Takeaways1)Fertilizer demand in the western hemisphere is strong,as evidenced by,MosaicS&P 500 INDEX(Rebased),record Phowever,as India has yet to reach a potash contract settlement.The recentCan
8、potex potash price settlement($400/m.t.)with China was below,Performance(%)AbsoluteS&P 500 INDEX,1m10.64.2,3m6.40.3,12m12.114.8,expectations,though the volume(1M tons for 1H13)was better than expected.3)Global shipments of potash and phosphate are poised to reach record levelsin 13(fig 3-4).4)Low wa
9、ter levels on the Mississippi River could adverselyimpact fertilizer shipments as early as FQ4 and may prompt customer pre-buying to assure near-term supply.2/3rds of urea,1/2 of phosphates,and 1/4thof potash shipments to US farmers are shipped thru the Mississippi.With near-term potash pricing tren
10、ds tepid,we are lowering our 13E EPS by$0.55 to$4.15,down 6%and our 14E EPS by$0.35 to$5.00,up 20%.Raising target$2 to$62.Key risks:grain prices,farm incomesOur$62 target is based on Mosaic trading at 12.4x 14E EPS,below itshistorical fwd P/E discount to the S&P.Risks:higher/lower crop prices.Foreca
11、sts And Ratios,Year End May 312Q EPS3Q EPS4Q EPSFY EPS(USD),2012A1.400.641.194.42,2013E1.050.871.224.15,2014E5.00,Source:Deutsche Bank estimates,company data_Deutsche Bank Securities Inc.Deutsche Bank does and seeks to do business with companies covered in its research reports.Thus,investors shouldb
12、e aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors shouldconsider this report as only a single factor in making their investment decision.DISCLOSURES AND ANALYSTCERTIFICATIONS ARE LOCATED IN APPENDIX 1.MICA(P)072/04/2012.,4 January 2013Ch
13、emicals/CommodityMosaicFigure 1:Detail of FQ213 results($millions),Q2 2013,Q2 2012%change Comment,Sales,$2,536,$3,015,(16%)Vol-10%(4.5MM tons vs 5.0MM tons).Lower phosphate and potash volumes,alongside lower phosphate pricing.NA and South America demand remainedstrong while demand in India and China
14、 lagged.,Phosphate,$1,762,$2,179,(19%)Vol.-6.2%(3.0MM tons vs.3.2MM tons),price-11.0%($544/ton vs.$611/ton),due to lower vols and pricing.Soft international demand due to delays to mitigateprice risk.Phosphate rock production in Florida at 3.9MMT(vs.2.9MMT in FY12)Outlook:Q3 volumes:2.5MM2.8MM tones
15、,DAP prices:$485-$515/ton,Op.rate above 80%.,Potash,$780,$839,(7%),Vol.-17%(1.5MM tons vs.1.8MM toes),price Flat.Lower op rates at 76%vs,78%due to lower vols in international market and lower pricing partially offset byhigher domestic vols.Outlook:Q3 volumes:1.5MM-1.8MM tons,Prices:$370/ton-$400/ton
16、.Op.rate above 70%.FY13:Brine management cost:$245MM-$275 MM.Expects Indian Potash demand to revive in FY13 amid foodsecurity requirements and need to maintain crop nutrition balance.,Corporate/Other,($5),($3),72%,Operating Profit,$563,$797,(29%),Gross profit$676MM vs.$881MM.Decline amid lower phosp
17、hate prices and,volumes partially offset by lower raws.Outlook:FQ13:SG&A expense:$420$445MM.,Phosphate,$245,$432,(43%),Gross profit decline($318MM vs.$476MM)due to lower vols and pricing,partially offset by lower raws(lower rock and sulfur costs)Outlook:Marginsexpected to remain flat in Q3.,Potash,$
18、318,$358,(11%),Gross profit decline($355MM vs.$394MM)due to higher brine mgmt costs,higher resource taxes and increased depreciation.Margins declined(45.5%vs.47%YoY).Outlook:Lower margins due to lower operating rates and lower pricing,Corporate/OthersOperating MarginPhosphatePotashInterest ExpenseF/
19、X Gains and LossesOther Income/,$022%14%41%$4$0$1,$826%20%43%$4$55($1),(100%)-420bps-590bps-190bps7%(100%)(163%),Expense,Pretax IncomeTaxesTax RateEquity in net earningsMinority InterestNet incomeOne-time itemsReported net incomeCash flow&Balancesheet items,$567($101)18%$5($2)$469$160$629,$855($231)
20、27%$1($2)$624$0$624,(34%)(56%)-920bps 13E tax rate in mid 20%.422%(25%)(25%)1%Cash&equiv:$3.40B.vs.$3.59B.CFO:$322MM vs.$517MM.D&A:$147MMvs.$120.2MM.Capex:$449MM vs.$393MM(vs.$387MM.13E Capex,guidance:$1.5B$1.8B.Source:Deutsche Bank,Company Data,Page 2,Deutsche Bank Securities Inc.,2012F,2013F,1995,
21、1996,1997,1998,1999,2000,2001,2002,2003,2004,2005,2006,2007,2008,2009,2010,2011,4 January 2013Chemicals/CommodityMosaicFigure 2:Mosaic fiscal 2013 financial guidance,Category,Guidance,PhosphatesQ3 Sales volume 2.5-2.8MM tonQ3 DAP selling price$485-$515/tonQ3 operating rate 80%PotashQ3 Sales volume 1
22、.5-1.8MM tonQ3 MOP selling price$370-$450/tonQ3 operating rate 70%Other,Capital ExpendituresCanadian Resource Taxes&RoyaltiesSG&AEffective Tax RateSource:MosaicFigure 3:Phosphate shipments(MM tonnes)M il Tonnes,$1.5-$1.8B$320-$380MM$420-$445MMMid 20%range,70,DAP/M AP/TSP,63-65,605040,38.5,39,40 41.5
23、 42,41,41 43,45,48,47.5,50,51 47.5,52,58,60,61,3020100,China,India,North Am erica,Brazil,Europe/FSU,Other,Source:Mosaic,Deutsche Bank Securities Inc.,Page 3,2012F,2013F,1995,1996,1997,1998,1999,2000,2001,2002,2003,2004,2005,2006,2007,2008,2009,2010,2011,4 January 2013Chemicals/CommodityMosaicFigure
24、4:Potash shipments(MM tonnes),M il Tonnes KCL6050,46,49.5 49,47,55.4,51,53,56,55-5750.5,40 36.5 34.53020100,40 38.5 39 41 40,44.4,31,China,North Am erica,Brazil,India,Indo/M alay,Other,Source:MosaicFigure 5:Earnings sensitivity to key drivers(FY13),Change,Pre-Tax Impact,EPS Impact,MOP Price($/m.t.)P
25、otash Volume(MM m.t.)DAP Price($/m.t.)Phosphate Volume(MM m.t.)Sulfur($/lt)Ammonia($/m.t.),$500.5$500.5$50$50,$66$175$111$87$45$24,$0.12$0.31$0.20$0.16$0.08$0.04,Source:Mosaic,Page 4,Deutsche Bank Securities Inc.,4 January 2013Chemicals/CommodityMosaicValuationOur$62 price target is based on Mosaic
26、trading at 12.4x 14E EPS,a 8%discount to theS&P 500 and below its historical(5-year average)3%relative FY2 P/E multiple discountto the S&P 500.The discount to the broader market multiple reflects the commoditynature of the crop fertilizer industry as well as our caution given macro headwindsincludin
27、g the sovereign debt crisis in Europe,reduced P&K fertilizer subsidies in India,below trend GDP growth in China and India,volatility in US grain and oilseed prices anda rising US dollar.RisksKey downside risks include 1)falling crop prices and lower farm incomes which couldresult in farmers spending
28、 less on phosphate and potash fertilizers,2)larger and fasterthan expected phosphate and potash capacity additions,and 3)the lowering of federalbio-fuel targets which could reduce demand for corn.Key upside risks include higher export taxes in other fertilizer producing countriessuch as China(suppor
29、tive of pricing),outages and production disruptions atcompetitors mines,and rising crop prices and farm incomes which would boostfarmers spending power.,Deutsche Bank Securities Inc.,Page 5,4 January 2013Chemicals/CommodityMosaicFigure 6:Mosaic Annual Income Statement,2011-2014E($millions),2011,2012
30、,2013E,2014E,Sales%ChangeCost of Goods SoldLower of Cost or M arket Write-DownGross ProfitGross M argin%ChangeSelling,General&AdministrativeSG&A/Sales%ChangeOther Operating ExpensesOperating ProfitOperating M argin%ChangeInterest Expense%ChangeForeign Currency Loss/GainOther Income/ExpensePretax Inc
31、omePretax M argin%ChangeTaxesTax Rate,9,93847%(6,816)03,12231.4%79%(373)3.7%3%(85)2,66426.8%102%(5)(90%)(56)(17)2,58626.0%108%(637)24.6%,11,10812%(8,031)03,07727.7%(1%)(410)3.7%10%(72)2,59523.4%(3%)19(467%)1722,63323.7%2%(715)27.2%,10,109(9%)(7,277)02,83128.0%(8%)(430)4.3%5%(65)2,33623.1%(10%)207%(4
32、5)(1)2,311(0.0%)(12%)(558)24.2%,10,6726%(7,417)03,25530.5%15%(454)4.3%6%(65)2,73725.6%17%15(25%)002,752(0.0%)19%(688)25.0%,Equity In Net Earnings of,Consolidated Companies,(5),13,24,27,M inority Interests in Net Earnings of,Consolidated CompaniesNet IncomeNet M argin%ChangeBasic Shares Outstanding%C
33、hangeDiluted Shares Outstanding%ChangeBasic EPS%ChangeDiluted EPS%Change,11,94519.6%126%4460%4480%$4.36125%$4.35125%,(1)1,93017.4%(1%)435(2%)437(2%)$4.442%$4.422%,(5)1,77217.5%(8%)426(2%)427(2%)$4.16(6%)$4.15(6%),(6)2,08519.5%20%416(2%)417(2%)$5.0120%$5.0020%,Source:Deutsche Bank,Company Data,Page 6
34、,Deutsche Bank Securities Inc.,4 January 2013Chemicals/CommodityMosaicFigure 7:Mosaic Quarterly Income Statement,2012-2013E,2012,2013E,Q1,Q2,Q3,Q4,YEAR,Q1A,Q2A,Q3,Q4,2013E,Sales%ChangeCost of Goods SoldLower of Cost or M arket Write-DownGross ProfitGross M argin%ChangeSelling,General&AdministrativeS
35、G&A/Sales%ChangeOther Operating ExpensesOperating ProfitOperating M argin%ChangeInterest Income(Expense)%ChangeForeign Currency Loss/GainOther Income/ExpensePretax IncomePretax M argin%ChangeTaxesTax Rate,3,08341%(2,235)084827.5%68%(101)3.3%15%(18)73023.7%78%5N/A(6)173023.7%80%(205)28.1%,3,01513%(2,
36、133)088129.2%15%(101)3.3%13%1679726.4%21%4N/A55(1)85528.4%38%(231)27.0%,2,190(1%)(1,676)051423.5%(40%)(91)4.2%9%(25)39818.2%(48%)4N/A(44)135916.4%(50%)(91)25.4%,2,821(1%)(1,987)083429.6%(16%)(117)4.2%5%(46)67123.8%(19%)5(30%)12168924.4%(18%)(189)27.4%,11,10812%(8,031)03,07727.7%(1%)(410)3.7%10%(72)2
37、,59523.4%(3%)19N/A1722,63323.7%2%(715)27.2%,2,505(19%)(1,758)074729.8%(12%)(112)4.5%10%(25)61024.4%(16%)616%(28)(1)58723.4%(20%)(163)27.8%,2,536(16%)(1,860)067626.7%(23%)(103)4.1%2%(14)56022.1%(30%)47%(17)154821.6%(36%)(101)18.4%,2,1950%(1,597)059827.2%16%(101)4.6%11%(14)48222.0%21%522%0048722.2%36%
38、(122)25.0%,2,704(4%)(1,894)081030.0%(3%)(114)4.2%(3%)(12)68425.3%2%5(13%)0068925.5%0%(172)25.0%,10,109(9%)(7,277)02,83128.0%(8%)(430)4.3%5%(65)2,33623.1%(10%)207%(45)(1)2,31122.9%(12%)(558)24.2%,Equity In Net Earnings of,Consolidated Companies,2,1,4,6,13,7,5,6,6,24,Net Earnings Attributable to,Nonco
39、ntrolling InterestsNet IncomeNet M argin%ChangeBasic Shares Outstanding%ChangeDiluted Shares Outstanding%ChangeBasic EPS%ChangeDiluted EPS%Change,(0)52617.1%77%4470%4480%$1.1876%$1.1776%,(2)62420.7%37%443(1%)445(1%)$1.4138%$1.4038%,127312.5%(50%)425(5%)427(5%)$0.64(47%)$0.64(47%),050718.0%(22%)425(5
40、%)427(5%)$1.19(18%)$1.19(18%),(1)1,93017.4%(1%)435(2%)437(2%)$4.442%$4.422%,(1)42917.1%(18%)426(5%)427(5%)$1.01(14%)$1.01(14%),(2)45017.7%(28%)426(4%)427(4%)$1.06(25%)$1.05(25%),(2)37016.9%35%4260%4270%$0.8735%$0.8735%,(1)52319.3%3%4260%4270%$1.233%$1.223%,(5)1,77217.5%(8%)426(2%)427(2%)$4.16(6%)$4.
41、15(6%),EPS-Extraordinary Items,$0.00,$0.00,$0.42,$0.42,Source:Deutsche Bank,Company data,Deutsche Bank Securities Inc.,Page 7,4 January 2013Chemicals/CommodityMosaicFigure 8:Mosaic Annual Segment Income Statement,2011-2014E($millions),2011,2012,2013E,2014E,Sales,Phosphate%ChangePotash%ChangeCorporat
42、e/OtherTotal Sales%Change,6,89546%3,06141%(19)9,93847%,7,83914%3,3018%(33)11,10812%,6,423(18%)3,70612%(20)10,109(9%),6,7125%3,9807%(20)10,6726%,Gross Profit,PhosphateGross M argin%ChangePotashGross M argin%ChangeCorporate/OtherTotal Gross ProfitGross M argin%Change,1,65424.0%136%1,46948.0%42%(1)3,12
43、231.4%79%,1,45918.6%(12%)1,62249.1%10%(4)3,07727.7%(1%),1,17218.2%(20%)1,65044.5%2%102,83128.0%(8%),1,27519.0%9%1,97049.5%19%103,25530.5%15%,SG&A&Other Expenses,PhosphateSG&A/Sales%ChangePotashSG&A/Sales%ChangeCorporate/OtherTotal SG&A&Other ExpensesSG&A/Sales%Change,3324.8%12%1163.8%3%94584.6%(26%)
44、,2963.8%(11%)1655.0%42%214824.3%(6%),3014.7%2%1744.7%5%204954.9%13%,3094.6%3%1854.7%7%255194.9%(1%),Operating Profit,PhosphateOperating M argin%ChangePotashOperating M argin%ChangeCorporate/OtherTotal Operating ProfitOperating M argin%ChangeInterest Expense%ChangeForeign Currency Loss/GainOther Inco
45、m e/ExpensePretax IncomePretax M argin%ChangeTaxesTax Rate,1,32219.2%229%1,35344.2%47%(10)2,66426.8%102%(5)(90%)(56)(17)2,58626.0%108%(637)24.6%,1,16314.8%(12%)1,45744.1%8%(25)2,59523.4%(3%)19(467%)1722,63323.7%2%(715)27.2%,87013.6%(25%)1,47639.8%1%(10)2,33623.1%(10%)207%(45)(1)2,311(0.0%)(12%)(558)
46、24.2%,96714.4%11%1,78544.9%21%(15)2,73725.6%17%15(25%)002,752(0.0%)19%(688)25.0%,Equity In Net Earnings of,Consolidated Com panies,(5),13,24,27,M inority Interests in Net Earnings of,Consolidated Com paniesNet Incom e,11,945,(1)1,930,(5)1,772,(6)2,085,Source:Deutsche Bank,Company Data,Page 8,Deutsch
47、e Bank Securities Inc.,4 January 2013Chemicals/CommodityMosaicFigure 9:Mosaic Quarterly Segment Income Statement,2012-2013E($millions),2012,2013E,Q1,Q2,Q3,Q4,YEAR,Q1A,Q2A,Q3,Q4,2013E,Sales,Phosphates%ChangePotash%ChangeCorporate/OtherTotal Sales%Change,2,22040%87340%(10)3,08341%,2,17910%83920%(3)3,0
48、1513%,1,65213%553(27%)(15)2,190(1%),1,789(5%)1,0376%(5)2,821(1%),7,83914%3,3018%(33)11,10812%,1,561(30%)96010%(16)2,505(19%),1,762(19%)780(7%)(6)2,536(16%),1,461(12%)73934%(5)2,1950%,1,638(8%)1,0592%62,704(4%),6,423(18%)3,70612%(20)10,109(9%),Gross Profit,PhosphatesGross M argin%ChangePotashGross M
49、argin%ChangeCorporate/OtherTotal Gross ProfitGross M argin%Change,41018.5%67%44450.9%73%(6)84827.5%68%,47621.8%(0%)39446.9%38%1288129.2%15%,25115.2%(45%)27048.8%(34%)(7)51423.5%(40%),32218.0%(33%)51449.6%(0%)(3)83429.6%(16%),1,45918.6%(12%)1,62249.1%10%(4)3,07727.7%(1%),28818.4%(30%)45947.9%3%074729
50、.8%(12%),31818.0%(33%)35545.5%(10%)367626.7%(23%),26318.0%5%33245.0%23%359827.2%16%,30318.5%(6%)50347.5%(2%)481030.0%(3%),1,17218.2%(20%)1,65044.5%2%102,83128.0%(8%),SG&A&Other Expenses,PhosphatesSG&A/Sales%ChangePotashSG&A/Sales%ChangeCorporate/OtherTotal SG&A&Other ExpensesSG&A/Sales%Change,763.4%
